The Canadian Investor - Will Trump Break the Stock Market?

Episode Date: January 15, 2026

The US Department of Justice has opened a probe into Jerome Powell and markets are interpreting it as a direct challenge to the independence of the Fed by Trump. We then break down Aritzia’s latest blowout quarter, highlighting rapid U.S. expansion, strong margins despite tariffs, and why execution continues to separate it from peers. We also cover Minto REIT being taken private at a 32% premium, why the deal is less compelling than it appears, and what it signals for Canada’s apartment REIT market. Finally, we discuss if capping credit card rates at 10% would be good for consumers or if it risks backfiring for borrowers and banks, and how payment networks like Visa and Mastercard could be affected. Tickers discussed: ATZ.TO, MI.UN.TO, V, MA, AXP New to investing? Check out these episodes: Investment Accounts Simplified and 5 Stocks on Our Radar Apple Podcast Spotify Web player 3 Things to Do Before You Invest a Single Dollar Apple Podcast Spotify Web player 8 simple ways to Save and Have More Money to Invest Apple Podcast Spotify Web player Investment Accounts Simplified and 5 Stocks on Our Radar Apple Podcast Spotify Web player Check out our portfolio by going to Jointci.com Our Website Our New Youtube Channel! Canadian Investor Podcast Network Twitter: @cdn_investing Simon’s twitter: @Fiat_Iceberg Braden’s twitter: @BradoCapital Dan’s Twitter: @stocktrades_ca Want to learn more about Real Estate Investing? Check out the Canadian Real Estate Investor Podcast! Apple Podcast - The Canadian Real Estate Investor  Spotify - The Canadian Real Estate Investor  Web player - The Canadian Real Estate Investor Asset Allocation ETFs | BMO Global Asset Management Sign up for Fiscal.ai for free to get easy access to global stock coverage and powerful AI investing tools. Register for EQ Bank, the seamless digital banking experience with better rates and no nonsense.  See omnystudio.com/listener for privacy information.

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Welcome to the Canadian investor podcast. I'm back with Dan Kent. We are back for another news and earnings episode. Our schedule was a bit different, but now we're back after the holidays, and this is a fresh episode we're recording on January 14th. Dan, how is it going today? Pretty good. It was, you know, there wasn't a lot to look at here, but Trump always seems to give us a lot of news to talk about. So it actually turns out, it should be a pretty interesting episode. Yeah, exactly. And just before we get started, just some housekeeping, if you're enjoying this show and you haven't done so already,

please make sure to give us a five-star review on whichever platform you're listening to. It does help other people discover us. I really much appreciate it. And if you'd like some more content from us, you can go on YouTube. We are posting some more content or go to join tCI.com where we offer full video episodes along with our portfolio updates every single month. And you can also have the podcast ad free as well as part of the package. and I provide my parents a portfolio update,

which will be coming out tomorrow or I guess today when you're listening to this on January 15. But as you said, with Trump, there's just keeps, he just keeps us on our toes. I guess that's the thing we can say. So unless you've been living under Iraq, so there's a Department of Justice,

so the DOJ investigation into Jerome Powell. So for the first time in history, a sitting federal reserve chair is under criminal investigation by the DOJ. It's an escalation in the conflict between the White House and the Federal Reserve, and the market is seeing this as a battle for institutional independence of the world's most important central bank, of course, the Fed. The DOJ investigation formally centers on Powell's testimony to Congress in June of last

year regarding the renovation of the Federal Reserve headquarters. and in a rare video statement released on Sunday, January 11. So just a few days ago, Powell explicitly called the investigation a pretext for political retaliation. You really didn't mince words. Did you watch the video? I did watch the video, yeah. He was, I didn't know what they were actually like looking, investigating him for. But yeah, he kind of called Trump out pretty aggressively too.

And he's done here. He's done soon, isn't he? Yeah, so his term is coming up in May, and I'll talk a little bit more about that, but Powell said the reason for the investigation was in the renovation or his testimony, but about monetary policy. So essentially, he thinks it's driven by the fact that he's not lowering rates or easing as quickly as Trump would like. And Trump has been very public since he took office that the Fed should be cutting interest rates faster. and Powell said they base their decisions on data. Of course, whether you agree or not with the decisions,

that's what he says that they do. And what makes the investigation even more eyebrow raising is that the District of Columbia is leading the investigation and the office is led by Janine Piro, a Trump appointment. And if you're not familiar with Janine Piro, I encourage you to Google or YouTube some video, She's been a very strong supporter of Trump.

She used to be on Fox News. And I believe she was a vocal supporter of him throughout the 2020, like, aftermath of the election and Trump saying he should have won and all that stuff. She was one of the ones that really stuck by him. So the fact that she's leading that office is also a bit of a head scratcher and just doesn't look all that great. And I was listening to a podcast and apparently Trump had an interview with the New York Times, which I'll have to find. But apparently they were asking him if it was politically motivated. I was just like, what? Like, I didn't even know it was under investigation.

Oh, my God. Yeah. It's not politically motivated at all. I just don't understand. Like, if he's on his way out, why? I don't know. Who knows? Like, I really don't know the logic.

I mean, sometimes it's really, I don't know what goes on in Trump's brains. So we'll have to see. But the market reaction, so not to get into the whole too much in the political drama here, but the market reaction was definitely mixed. It was down a bit early on Monday, but the market has been kind of whipsawing a little bit. It's down a decent amount today. Who knows whether the stock market is reacting to this or not? I was looking at bond yields.

Bond yields have been pretty stable, at least so far, for the U.S. treasuries, the 10 years specifically. Gold and silver, though, definitely reacted to that, to the news. And gold and silver actually hit record highs, and they've been on a terror, especially silver, but they've both done very well ever since the announcement has happened. So you have gold here that is looking the last five days. It's up about 3%, but doing quite well.

And you have silver here the last five days. It's up probably more than that. I'll have the percentage here, but it's probably up around like 10, 15% since the announcement. So they're both doing pretty well ever since that came out, whether it's a market reaction to that or just continuation of what had been happening in the golden and silver market. I mean, my hypothesis would be that it's just a market looking for safe haven assets, for assets that are not tied to the U.S. government, where there's just a market. no counterparty risk if you hold that ass. I think that's the market saying, you know what?

We don't. There's a lot of reasons for us to not really trust the U.S. government, the U.S. dollars, and U.S. institutions right now. And why would we be owning U.S. treasuries and they're looking for alternatives and precious metals is that alternative? Yeah. I mean, Trump has kind of been vocal for a very long time that he wants interest rates lower. And I mean, ultimately, politically, for the most part, you probably want politicians would probably prefer interest rates to be as low as possible for as long as possible because, you know, in that environment, it's generally more beneficial. But that's exactly why these institutions are supposed to be independent. Like they're not supposed to be, you know, politically, you know, push to, you know, drive interest

rates lower or raise them, whatever it may be. And yeah, I mean, obviously the market is not going to like it when Trump is continuing to to meddle in this. but it's not really anything new. Like, isn't it on X or probably on true social or whatever? He's called Powell an idiot before. Oh, yeah. It's nothing new.

And he's not the first president to criticize, to criticize the Federal Reserve either. I mean, there's an infamous story. I don't remember who it was, which president and which Fed chair. But I think 40, 50 years ago that there was like almost a physical altercation between the president and the Fed chair. So it is definitely not the first. time. So I want to be, you know, crude, just show both sides here. But I think the markets are being nervous because if the president would get his way and typically political figures, if they get their way with monetary policy, they tend to make sure that rates stay low. They ease. They want

to stimulate the economy. And it tends to be inflationary. And that could also be a reaction with the precious metals here that it could create some inflation down the line, especially if there's a lack of independence, but now Trump, what it is creating is that there are now some Republicans who he'll need the backing from Republicans to be able to certify his nomination for replacing Powell in May. And now there are some Republicans that are coming out and saying they may not support the Trump nomination for replacing him. And it is a pretty, it would be a pretty tight vote if he gets all the votes. So it may actually badfire, we'll have to see. but definitely some drama coming out

and we'll have a bit more on Trump later in the podcast but it's definitely worth listening to because it may involve some investment that you own specifically credit card companies and banks a little bit teaser on that. I recently had to travel to Calgary for some medical treatments and I wanted it to feel like a home away from home

while I was recovering. I found an apartment on Airbnb that made all the difference. While I was on demand, it helped that I could cook some homemade meal in a real kitchen and just sit in a comfortable living room or rest in bed. Having a space that actually felt like home helped me focus on my recovery rather than the stress of the trip. It really got me thinking about our own place. That host had provided me with some much-needed comfort when I really needed it,

and maybe our home could do the same for someone else. Hosting our home on Airbnb would let guests experience our neighborhood while giving us a little extra money to put toward a fun trip when I'm back on my feet. Plus, it's flexible, we decide exactly when it makes sense to host our home. Your home might be worth more than you think. Find out how much at Airbnb.ca slash host. Calling all DIY, do-it-yourself investors, Blossom is an essential. app for you. It has been blowing up with now more than 50,000 Canadians plus and growing who are using

the app. Every time I go on there, I am shocked. The engagement is amazing. This is a really vibrant community that they're building. And people share their portfolios, their trades, their investment ideas in real time. And it's all built on the concept of transparency because brokerage accounts are linked. And then once you link your brokerage account, you can get in-depth portfolio insights, track your dividends, and there's other stuff like learning duolingo style education lessons that are completely free. You can search up Blossom Social in the app store and join the community today. I'm on there. I encourage you go on there and follow me, search me up, some of the YouTubers and influencers and podcasters that you might know, I bet you they're already on there. People are just on there

talking, sharing their investment ideas and using the analytics tools. So go ahead, Blossom social in the app store, and I'll see you there. Let's move on here. One of your best calls in the last five years, I guess, huh? Yeah. Is it your best call, or Ritsia? Just another phenomenal quarter. Yeah, it would have to be pretty close.

I first bought it. I think I bought it in like 2019. And then I think I sold it a few years later, made a bit. And then it dipped and kind of got back in in 2023, I think. But yeah, it's just had a huge run over the last while. So they reported earnings. I can't remember. It was probably late last week.

So revenue was. up 43% adjusted even of 52% and earnings by 82%. And comparable sales came in at 34%. And I mean, this is, it's just been crazy because the expectations were for, I believe, around 23%. And this is kind of, you know, a lot of people have mentioned like, oh, it's the holiday season. Obviously, it's going to do good in this quarter. But all these numbers are year over year, right?

So you're comparing holiday versus holiday. So it just kind of blew expectations out of the water. And, you know, the company's U.S. sales grew 54% year over year. And they initially had, like they mentioned when they build a boutique in the United States, they'll typically turn it around. Like the money they spend on that boutique will typically be made back within 12 to 18 months. But they found now they are making it back in less than a year. So this is, I mean, when you can open up a store, pay off all your expenses of that opening in less than a year, it's pretty substantial.

They currently have 72 stores in the U.S., but they do see expansion towards 200. So, yeah, I mean, a lot of people have been asking if this one still has runway at this point in time. I mean, according to them, they still do. 200 stores versus 72 is a pretty large buildout. And the one thing I think that is like impressing people, you know, a lot of people is just kind of how they've managed the tariff situation. So at this point last year, around 35% of their manufacturing was exposed to China. So they've reduced this down to mid single digits in a year. So they're only around.

Yeah. And like honestly, I don't know how they did it because it must be because they're, you know, smaller, more nimble, nimble. Nimbler, I guess you could say because like you've seen Nike. They've had kind of a heck of a time navigating around tariffs. They're also like 10 times the size, I think, of a company like Eritzia. So Lulu Lemon has been having issues with Eritzia. They've just kind of moved all their exposure out of there in less than a year. So despite that, the company still did have a 410 basis points, so 4.1% impact to gross margins because of tariffs.

But gross margins still increased 30 basis points year over year. So it's been crazy. They're guiding to 23 to 26% revenue growth. to close out the fiscal year next quarter. So next quarter is their Q4. And they announced that they're going to hit their 2027 revenue guidance an entire year early. Yeah. And again.

Good for them. Yeah. It's, uh, that's crazy. Yeah. I mean, it just kind of shows like, I had mentioned this a few time on X and fashion is very, very difficult. I mean, you've seen, you know, I call it like dumpster diving, I guess. That's kind of harsh because like, I do think Lulu Lemon and.

Nike are high quality companies, but they're on the downtrend. Like a lot of people aren't buying it right now. Like they're seeing pressure everywhere. Whereas you see companies like we went over last week, Group Dynamite, Eritzia, they're just kind of like riding the wave. There's a lot of people kind of, you know, buying the clothing, things like that. And this type of stuff can can last for a while. It can also fall off a cliff. Like, don't get wrong. I think you almost have to own these and have a really good pulse on what. The fashion movement is, right? So just keep an eye on what influencers are doing, what, like, their target market is doing.

You can't really own this, you know, 10, 15 years without thinking about it because it could definitely just happen. And within a year or two, they just fall off a cliff because now the next hot thing is in. And it's not them. And if they try to pivot, it's not easy. And I think we're going to probably see that with Lulu Lemon, too, is I don't know how well they're going to be able to pivot. I think there'll still be a pretty, a quite profitable business, but it's just a growth will likely not be there going forward. Yeah. It's there are companies that you just can't.

They're definitely not set and forget. I'll tell you that much. Like, if you think, like say, you know, expectations were for 23% comparable sales growth. Like, I think if Eritzia would have even posted like 21%, you would have. would have seen like a like a 10, 15 big, big percent dip on the day. So like when you have momentum like this, you definitely need to keep up the momentum for sure. And yeah, like it in in 2023, like it looked like it was falling off a cliff when they had that inventory build up. And again, like I'm not saying I knew for certain that it was just kind of ill timed. Like it could

have very well been, you know, the brand fallout and it would have never recovered. And that's kind of a risk with these companies, which is why I take money off. the table with this one all the time. Like, I've trimmed it. I want to say like four or five times since owning back in 2019. I mean, obviously, I wish I hadn't, but I mean, it can fall apart quickly, but it's a high quality company, definitely. Yeah. Okay. Well, let's, uh, congrats. And to those that own it. And of course, obviously, you just have to be aware of the risk for that one, especially tied to fashion. So now let's move on what I was alluding to Trump making headways. again. So he's pushing for credit card rates to be capped at 10%. So on the surface, you might be

hearing this and say, wow, this is a great idea. But there is definitely second order consequences that I think people tend to just miss the mark completely. They just see this and think it's just going to be lollipop and rainbows or butterflies and, okay, I'm going to be cap at 10%. I have a balance on my credit card and I just pay the minimum, so it's going to help me a whole lot. I'm going to pay that quicker. It's not that easy. So he made the headlines, again, with calling for a temporary one-year cap on credit card interest rates.

And for context here in the U.S., rates are in the mid to low 20s currently for credit cards, not too dissimilar to Canada. And according to the New York Fed, because the New York Fed, there's all these different Fed and they'll do different surveys and studies, there was $1.23 trillion in credit card debt in Q3 of 2025 in the U.S. So maybe it's around $1.3 trillion at this point, but it's significantly, it's a large amount. So clearly, this is, it's big news if it goes through. And obviously slashing interest rates on the card would have a massive impact on the interest paid. But if you're a consumer, it might not be all that good and I'll explain why. Well, first, just a quick reminder,

and I know you'll probably mention that the interest you pay on a credit card is to the bank that issues, the credit card. It's not to Visa or MasterCard. A Visa on MasterCard make money on essentially the network, the banks using their network, the cards that are being used using their network. So they make a little, a tiny bit of money on every transaction. So that's how they make money. Amex is kind of a hybrid. They issue the card or they can issue the card like a bank or it can be used on the Amex network by another bank. So we see that.

If you look at some of the credit card offerings in Canada, you may have a Amex card that's not branded with any bank. And you can also have an Amex card that is actually branded with another bank. For example, Scotia, whatever it is. Yeah, they a lot of, well, I find like most people understand this about. the credit card companies, but there was a few comments about like how badly it would would impact them. But I mean, I still do think that it isn't good for them in different ways, which I imagine we'll talk about a bit. But I think there can be some impact on Viz and Massacard, but probably

not massive impact. And I'll go over. Again, it's kind of second order effects. So I have a lot of thoughts about this. So I'll kind of chime in at the end. Okay, this is, yeah. So. So. again, based on Fed data, the charge-off rate is really interesting when you start looking at credit cards here in the U.S. I would assume it's probably similar in Canada here. So this was updated, I guess, Q3 of 2025 again. So this again is the Fed data. So it's a pretty good source. And the average charge-off rate for credit card was in Q3, about 4.2%. But in the last four, 40 years, it's really varied quite a bit. It went as low as 1.6% during the pandemic and as high as 10.5% in the aftermath of the

GFC, the great financial crisis. I'd say the average is probably around 4.5%, 5%, probably around what we're at right now. And for those wondering, this is just the money that's being written off by the credit card issuers. So typically it will be the banks, unless it's Amex, but Amex can also act as the bank here. So I wanted to put this into context because it's important that this is an average. It's hard to find data by income brackets based on surveys I've seen. The charge off rates will definitely vary, though, depending on income and credit score.

And we've seen this in Canadian banks, right? So if you have a credit card issue by a big bank in Canada versus Canadian tire, the charge off rate is actually very different. If I remember correctly, Canadian tire will be like 6, 7%. and the large banks will probably be around 3%. That's just to show because they have a different type of customer. And of course, it can't create an issue. The higher the charge off, the more the higher your interest rate has to be

to be able to make up for that amount. Now, keep in mind, there are roughly 650 million credit cards in the U.S., and a good portion of those credit cards will be with borrowers that don't have great credits and are using it to make ends. meet. I know it sucks to hear, but that is the harsh reality. Those borrowers are clearly paying a lot of interest at current rates. So why isn't it good for borrowers? Well, banks aren't stupid. When you have a high charge off rate, when you're charging off at four and four and a half, five percent, even higher, you change high, you charge higher interest rate to make up for that higher risk profile.

It's pretty simple. If you have a loan, that is secured, so backed by a real asset, for example, and you have a good borer, then you can get away with charging really low single-digit rates because the charge-off rate will be much, much lower. This is what subprime lenders like Go Easy Financial will do. They charge extremely high rates to make up for higher charge-off rates, and that's how their business model works. If you can't charge an interest rate that justifies this, then you only have one option as a bank. You have to start tightening your borer requirement so that the charge off rate goes down. So the better borrers you keep the lower because they'll have a lower charge off rate,

maybe it's going to be 1 or 2% or even lower than that. So you're happy to offer them a credit card at 10% because it'll still be profitable for you. But those borers that are not that good carry a large balance may sometimes wait a month or two to even make the minimum payment. the banks will probably cut them off either that or they'll reduce their credit or they just won't renew the credit card when it comes due. And these are the borrowers that likely live paycheck to paycheck. And they need that money.

So what are they going to do? They're either going to go the subprime route, like a go easy lender, which is going to charge way higher interest rates, payday loan lender. They'll go to buy now, pay later. By the way, buy now, pay later can get quite expensive. with fees if you don't pay later on time. So you have, and it will be significantly higher than the credit card rates, or even worse case, they will go and get money from a loan chart.

So it's not like it's without consequences. And clearly for the banks, it's going to affect their profits. And I don't, I'm sure no one is shedding a tear for the banks that would lose a bit of money. But I think it's not really a great outcome. But definitely the winners here would be companies subprime lenders and by now pay later companies. And for the card networks, which I'm sure you'll want to chime in on, if this goes through and becomes a longer term thing, then it could have a negative impact on Visa MasterCard and even Amex. Keep in mind that they make a little bit of money, like I said, on each transaction that goes through the network. And Amex is different since they do it a bit in a hybrid way.

so they'll make money on the interest that people have to pay. They also have their fees for credit cards, so the premium fees, so the card fee that now has been going up, kind of the Costco model a little bit for credit cards here. And they also have the network, which is much smaller, of course, than a MasterCard and a Visa.

If the banks make it hard to get credit cards, then it could affect the number of credit cards in circulation in the U.S. obviously this is not global and the other risk is that if it would go through in the US that other governments around the world would potentially try to put something in place like that and then you could potentially have a larger impact on the amount of credit card and circulation but that would be the worst case scenario and I know I think you bought some of Visa MasterCard recently so I'll let you chime in on that part yeah I've owned visa for a while

I added like on the on the dip yesterday. I would probably would have added anyway. It's kind of something I buy quite frequently. But yeah, I don't know. I like I would say there's like next to no chance that this actually goes through. I don't think it will go through because it's, it's a nightmare. Like a lot of people think it's good, but it's really not good. I mean, if you think about it, like the banks will give unsecured loans to like the highest quality buyers at or sorry, borrowers at.

that rate. Like, you can't really get an unsecured loan for, you know, much less than 10% now. Yeah. And so, like, you want to take the worst form of a credit card, for example, and kind of dial that back. Like, all the banks are going to do is, first off, just we've seen this with automobiles in Canada. Like, the banks will just stop going into that area of business. You know what I mean? Like, credit cards are not a huge draw for, you know, the bank, at least here in Canada, I'm speaking, I don't know how it is in the United States, but I know like Royal Bank, let's say, their credit card area, like the segment of total loans is very, very tiny. Like if they, in theory, had to cap the rates at 10%, they'd probably just stop offering them. Yeah. Or they would

go aggressively after the best consumers. And that's probably the other thing is that the highest quality ones, the people that have the most money, will probably get incentives to go and get credit cards with banks because they'll want those best customers and they'll give them even more perks just to make sure that they have them because they don't know they won't have a high credit risk with them. So the people he's trying to help are the ones that are likely to get hurt the most with this kind of stuff. Exactly. Because like even if you think about the highest quality borrowers, like let's say you have a high quality borrower, even at 10%, they're probably not going to carry a balance. Like generally, you know, your higher quality borrowers just pay it off.

So, yeah, I just... Or maybe they forget to make a payment on time once, uh, yeah, blue moon. And it's just because, you know, they just forgot or something, right? So it's just, yeah. And like, and if you think about it, if you think about all, like, if they were to take all of the credit cards that are, I don't know what the APR is in the United States. I know it fluctuates. It's probably like, yeah, 25% between 20 and 30. So what are they going to do? Like, what are they going to do with all the people that the banks don't want to lend to anymore? Like if you have, say you're a terrible borrower, you got $50,000 on your credit card and the government says to the bank, you got to scale that credit card back to 10%.

Is the bank going to go to the person and be like, give us this balance and we don't want to lend to you anymore? I don't know. I mean, I would assume they would, yeah, either that or they'll make sure they just don't renew it. I don't know what the process would be, but I can for sure tell you that the bank will try to get rid of those. Yeah, because I would guarantee there's some sort of. clause and like a credit card agreement that they can they can cancel your card and not allow you to use it anymore. I don't know if they could call back the balance. Like I know they can do that on like say a he lock. Like if your if your home falls enough, they can kind of, you know, tell you that you got

to pay it back. I don't know if they can do it on a credit card. Maybe they could lock their credit limit. That would be a way to do. Yeah. They just say like here's your balance. So you'll keep accruing interest pay it off, but you can't borrow anymore. Yeah. So it's it's such a it's very hard. to navigate this. Like obviously credit cards are predatory to a certain degree, but they're also because like, again, as you mentioned, would go easy or like an alt lender. They're giving these interest rates because the charge off rates are so much higher that they need to.

Yeah. There's a reason they can give you, you know, prime plus a little bit on a mortgage. It's because, you know, the charge off rates are much, much lower than a credit card. So that's why they need to charge that amount. And then for the payment rail companies, like obviously it is kind of a headwin, because if you take away the vast majority of people who use these cards, obviously you have lower transactions and you're getting a chunk of each of those transactions. Like the only way you could ever offset it is if you had a high quality basket of buyers

that now kind of get more credit cards and start using more. So, yeah, I don't think, like the reason I don't think it's going to be a headwin for the card companies is I don't think it's going to go through. I don't think it's feasible. No, I don't think so either. I think the cooler heads will prevent. and some people in the administration that understand markets, which I do wonder that Trump understands markets sometimes or not.

We'll tell him it's not a good idea. But hey, we'll see. Maybe it'll happen and then is going to blow up in his face. So that wouldn't be terrible either. I recently had to travel to Calgary for some medical treatments and I wanted it to feel like a home away from home while I was recovering. I found an apartment on Airbnb that made all the difference. While I was on demand, it helped that I could cook some homemade meal in a real

kitchen and just sit in a comfortable living room or rest in bed. Having a space that actually felt like home helped me focus on my recovery rather than the stress of the trip. It really got me thinking about our own place. That host had provided me with some much needed comfort when I really needed it, and maybe our home could do the same for someone else. Hosting our home on Airbnb would let guests experience our neighborhood while giving us a little extra money to put toward a fun trip when I'm back on my feet. Plus, it's flexible. We decide exactly when it makes sense to host our home. Your home might be worth more than you think. Find out how much at Airbnb.ca slash host. Calling all DIY, do-it-yourself investors, Blossom is an essential app for you.

blowing up with now more than 50,000 Canadians plus and growing who are using the app. Every time I go on there, I am shocked. The engagement is amazing. This is a really vibrant community that they're building. And people share their portfolios, their trades, their investment ideas in real time. And it's all built on the concept of transparency because brokerage accounts are linked. And then once you link your brokerage account, you can get in-depth portfolio insights, track your dividends.

and there's other stuff like learning duolingo style education lessons that are completely free. You can search up Blossom Social in the App Store and join the community today. I'm on there. I encourage you go on there and follow me, search me up, some of the YouTubers and influencers and podcasters that you might know, I bet you they're already on there. People are just on there talking, sharing their investment ideas and using the analytics tools. So go ahead, Blossom Social in the App Store, and I'll see you there. I guess we'll finish here with Minto reaped being taken private.

So that was pretty big news. I think it was last week, right? Yep. Yeah. So this one was interesting because we had talked about, well, you had talked about Capri. A while, you know, the kind of Toronto-based or like kind of that area type properties. And Minto is a company that does primarily operate in Eastern Canada.

So they are being taken private in a $2.3 billion deal. This is an apartment reet. So, you know, major areas would be Toronto, Montreal, Ottawa. So I think that's like, it's got to be like 80 plus percent of the portfolio, maybe even more. They do have some exposure in the West, but very little. So their exposure in Montreal is more than double their entire exposure in terms of total suites that they have a West. So shareholders will get $18 per unit. That's a 32% premium over the closing price.

And this does kind of sound great, but I mean, in reality, it's a pretty subpar offer. So Minto IPOed for around $18 a share back in 2019. So you kind of got your distributions throughout those years, but this was never a high yielding reet. A lot of residential reits are not high yielding reits. So you were getting like 3% a year from Minto on the dividend, maybe a little bit higher when it got into the low teens.

So I mean, to go six plus years to just get your unit value back is not really optimal. I mean, I guess there's a lot of reits that are in a much, much worse position. But at one point during like peak real estate euphoria, I guess this one was trading at $27 a unit. So it was doing quite well. And it just had it had too much exposure to, you know, a lot of real estate hotbeds. You know, one could argue that it's Calgary locations were the only ones that didn't see like a massive bubble like surge in value during COVID. But it's a very low portion of the portfolio. It's not really the fault of the wreath or management.

it was just kind of the speculation at that time. In addition to this immigration, you know, scaling back apartment supply going way up, putting a lot of pressure on rents. And you, we had spoke about Capri, how they have that big buffer in terms of rent. I think their average rent was like, what, 1700 or something, whereas like the average in like, say, Toronto was like $2,000, $250. So they had kind of room to still raise rents. Like Minto just really didn't have that luxury.

So their average monthly rent was already around 2050, $20, $20,000. $2,100. So you're in a bit of a difficult spot because rent is declining. You're already, you know, at a premium or at least, you know, par with the market. So the one thing I will say about Minto, that's a bit different, I think, from Capri is they do offer a lot of furnished options. Yeah. It could be a reason why it's a bit higher just because of that. Oh, okay. Yeah, yeah. So like short term rentals for people who are probably looking for, yeah. Yeah, that's between, yeah, like we, and my old job, I also used to do relocations of employees. And Minto offered some shorter term rentals, like two, three months while, let's say, they

move from a city. They sold their home. They bought a new home, but there's like a two, three month gap between them moving to the new city and closing on the new property. So they would go into long-term rental. Yeah. Okay. Well, I'd be interesting to see.

They probably don't separate this information, but furnish first non-furnish rents. I imagine they don't. Yeah, I would assume it's slightly higher. That would be my assumption, but I just wanted to clarify that. Yeah. And they also mentioned that getting access to capital was difficult because of being public. So their units were way down, not really reflecting the true quality of their portfolio. And so if you're going to issue units, obviously you're going to get them near, actually usually at a discount to market price. So you're just kind of diluting more units for when you think your properties are undervalued. It's not the best, but you need access to capital. So I do think a company like Minto going for that, you know, 32% premium just kind of gives an idea of how cheap some of these apartment reits are. But I also think it's kind of a harsh lesson that, you know, not all residential reits are the same either. Like you really need to dig into what they own. I mean, there's a few residential reits here in Canada. I can't remember the name of them, but they own like retirement properties in Florida. Whereas like this one's yeah, an apartment reet that's like Montreal, Ottawa, Toronto heavy. So.

Yeah, they're very niche areas. A lot of these reits operate in, you know, very specific areas of the market. But yeah, it's going private. Yeah, exactly. Well, that was kind of, it helps my thesis being a bit more validated here. And I think that definitely helped the price of cap reed. I think it's up like 10% since I talked about it on the podcast about a month ago, which is not nothing for a reed. And then you're still getting about 4% of course. There's some risk. There's a bunch of potential headwinds with slow pop. population growth, a lot of rental completions and new buildings being completed. And clearly the overarching number for rents are not looking great in Canada. But I think those are more short term. And once you start looking at the number, I know cap reed specifically, the underlying number

are quite good. So I think it's really a situation. You have to be careful. You have to do your due diligence, but you know, when the market is really down, there's blood on the street, you can find some good value in certain sectors, but again, you typically want to state to quality because there's also a reason why the market is down on those sectors, right? So. Yeah. And I mean, I would imagine you're going to get a lot of situations where they are like private deals because what is cap reeds market cap. It's, I don't even know what it is like five, six billion. And this was a $2.3 billion deal. So it's like even for, you know, one of the larger, residential reeds in Canada, this would be a difficult deal to to navigate. I would imagine a lot of

that $2.3 billion is debt. But yeah, it's there's going to be consolidation, I would imagine, in this space, especially if you don't see it like a recovery in prices, because a lot of these are trading at like large, large discounts to net asset value. Now, like one could argue the net asset value is probably not as high as, you know, the companies believe. But I also think it's, it's probably somewhere in the middle, which still leaves some some pretty deep. deep discounts. But yeah, I wouldn't doubt if this wasn't, you know, if there was more of these types of offers unless, you know, unless things start to improve. Yeah, no, exactly. And if I didn't say it, I do own, uh, I did start a position about a month ago in Cap Reed. So just full

disclosure here. I guess this is a good point to end it. A bit more slow on the news, but again, the orange men coming through from the U.S. and giving us some stuff to talk about. Hopefully you enjoy the episode. We're actually going to be back on Monday with one of our regular episode. We'll be all going over eight really interesting companies to consider for a TFSA in 2026. So if you want to list a name, not a deep dive either for all these names, just kind of a quick overview of each and why we think there'd be a good fit for a TFSA. Just make sure you don't miss Monday's episode. Thank you a lot for listening and all the support. We really appreciate it. And again, just a reminder, if you can give us a five-star review on the platform that you use, it would really be appreciated.

We will be back and see you on Monday. The Canadian Investor Podcasts should not be construed as investment or financial advice. The host and guests featured may own securities or assets discussed on this podcast. Always do your own due diligence or consult with a financial professional before making any financial or investment decisions.